ES blk womanThe Labor Department recently finalized a fiduciary rule that will hold anyone who provides investment advice to a fiduciary standard and mandates these advisers must put their clients’ interests first. It stipulates that an adviser must place his or her interests below that of a client. It consists of a duty of loyalty and care. Life and disability insurance products are exempt from this fiduciary ruling; however they will likely be looked at more closely in the future.

The ruling clearly outlines key areas where a conflict of interest may exist between financial advisor and consumer interests, and establishes priority on consumer interests. If this rule were expanded to include life, health, and disability products, advisors and insurance companies would be impacted in several ways. In this article, we explore what it means to put life insurance applicants first, and the importance of improved communication and understanding by the applicant in three specific areas: 

  • Precision underwriting can get the applicant the best price and the most insurance coverage
  • Overall cycle time of the life insurance examination has been improved
  • The applicant experience can be pleasant and actionable toward better health

Precision underwriting protects the applicant and their family at the best price 

There is growing interest in simplified issue products from both life insurance companies and advisors. On the surface, these products appear to be quicker and less intrusive for the applicant since there is limited or no underwriting. A brief medical history is often taken, but fluids (blood and urine) and a paramedical examination may not be obtained. In the most common model, applicants with preferred, standard, and impaired risk are pooled together and a higher premium is offered to all in an attempt to cover the expected increase in mortality risk.

In contrast, precision underwriting with proven protective value tools like laboratory testing of blood and urine and a paramedical exam providing current biometrics can give a more precise risk of the applicant at any age, resulting in a more personalized and fairer premium. Many applicants are new to the life insurance process and may not understand that without a medical exam and laboratory tests they will often receive higher premium policies. If we apply the new fiduciary standard to life insurance and put the applicant’s interests first, our fiduciary responsibility is to make sure that they can obtain the best coverage, at the best price, if they undergo testing for more requirements. Additionally, laboratory testing accounts for about 3% of total healthcare costs, but drives more than 70% of health care decisions.[i]

Reducing life insurance cycle time and the “time myth” 

The appeal of streamlined underwriting and simplified issue is that they are quick, easy, and less intrusive. All of that is correct, but under a fiduciary standard where applicants’ interests are prioritized, is that really the best course of action for them? The life insurance cycle time has certainly been optimized over the past five years, utilizing fast mobile strategies and call centers to reach and schedule applicants quickly. When compared against the healthcare sector, life insurance is usually faster and more efficient. How many times have you called your primary physician’s office with a health problem to be told they can see you in 3-4 weeks? If it is a specialist, it may be closer to 6-8 weeks. Patients accept lengthy waits for appointments to receive high-quality care.

If we put applicants first, our fiduciary responsibility is to effectively explain that a full examination and laboratory blood and urine analysis is probably quicker and much more efficient than their local healthcare system. This will allow them to obtain the best coverage, at the best price.

The applicant experience is beneficial and actionable 

The paramedical examination with blood and urine collection is most often an insightful and beneficial experience for applicants. By sharing laboratory data in an informative and actionable format online, an applicant may improve his or her health directly and with the help of his or her physician. It encourages applicants to “know their numbers” and guides them to live a healthier lifestyle. Everyone wins when laboratory and exam data is shared. The applicant gets actionable health data; the carrier organization and their distribution network builds a better marketing brand; and there is the high potential for decreased morbidity and mortality of the policyholders who utilize the data.

If we put applicants first, our fiduciary responsibility is to effectively use precision underwriting to its fullest potential and share the actionable data with applicants so they can better improve their quality of life.

Conclusion 

If we put applicants first today, the industry will be well ahead of any future rules around fiduciary responsibility regarding life insurance. Precision underwriting is the most accurate method for assessing mortality risk and the most beneficial model. It allows an applicant to receive the most life insurance coverage at the fairest price. In addition, applicants receive valuable, actionable health insights through laboratory results that can help increase their quality of life. If we take the time now to ensure that all applicants understand what precision underwriting provides them, any future fiduciary standards should not be an issue.

[i] QuestDiagnostics.com

Make prevention a priority

by Jessica Wahaus on June 13, 2016

This June, we’re committed to raising awareness about men’s health.

Many serious health conditions can be prevented or detected early with regular checkups. Below are some of the regular screenings recommended for men1:

  • Men's Health MonthHigh blood cholesterol – Regular testing is recommended for men over 35. High blood cholesterol increases chances for heart disease, stroke, and poor circulation.
  • Blood pressure – A blood pressure checkup every two years can reduce the risk of strokes, heart attacks, kidney and eye problems, and heart failure.
  • Colon cancer – Beginning at age 50, men should be tested regularly for colorectal cancer, and the frequency of testing depends on the type of screen conducted. If there is family history of colorectal cancer, testing may need to begin before age 50.
  • Diabetes – Men with a blood pressure higher than 135/80 should talk with their doctor about a diabetes screening.

According to the Centers for Disease Control and Prevention, women are 100 percent more likely than men to seek preventative healthcare. Regular screenings can help catch these serious diseases early when they are easier to treat.

Prostate cancer is the second most common cancer in American men, following skin cancer. According to the American Cancer Society, nearly one out of every six men will be diagnosed with prostate cancer during his lifetime. Total prostate specific antigen is a protein produced in the prostate gland. Elevated levels of PSA could be an indication of prostate cancer. By adding Total PSA testing to male applicants 50 years and older, prostate cancer can be identified early. View ExamOne’s test reference sheet that highlights how PSA is calculated, various study results and recommended testing guidelines.

Show your support for men’s health by wearing blue this month, and get more information about prevention from MensHealthMonth.org.


1Men: Stay Healthy at Any Age: 2014 Update. March 2014. Agency for Healthcare Research and Quality, Rockville, MD. https://www.ahrq.gov/patients-consumers/patient-involvement/healthy-men/healthy-men.html

Committed to protecting the life we’re building

June 7, 2016 #Committed2 You

When my husband and I became engaged, all the usual planning questions began racing through my head. What venue should we choose? What kind of flowers do I want? And – most importantly – how many cake flavors can I have? We also made dates to sit down and talk through our current financial situation […]

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The global diabetes crisis and what it means for life insurers

May 31, 2016 Carriers

According to the World Health Organization (WHO), the number of people with diabetes has risen from 108 million in 1980 to 422 million in 2014.[1] Diabetes was attributable to 3.7 million deaths in 2012. Forty-three percent of all deaths due to high blood glucose occur before the age of 70.[1] Type 1 diabetes is most […]

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Is “quick and easy” the right message for life insurance?

May 20, 2016 Uncategorized

In a time where we can have almost anything by simply tapping a small electronic device, many consumers have adapted to a “quick and easy” world. But at what point is quick and easy not the right decision and when should a consumer be okay with that? Life insurance is a valuable tool in a family’s overall […]

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The top three quality errors that impact underwriting

May 3, 2016 Carriers

Paramedical exams and related laboratory testing are vital pieces of the underwriting process when issuing policies to life insurance applicants. Inaccurate or incomplete data about an applicant could place him or her in the wrong risk pool, skewing their rating. Alternatively, the mistake can be an overlooked medical condition, leaving an insurance company exposed to […]

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Our Paperless Process

April 21, 2016 Uncategorized

Introducing our eSignature paperless process. With DocuSign eSignautre, documents are immediately processed, saving time and paper.

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Medical Laboratory Professionals Week

April 18, 2016 #Committed2 You

At Quest Diagnostics and ExamOne, we perform and interpret millions of lab tests each year. We know behind every test is an individual awaiting results plus a dedicated employee making sure that test is processed quickly and properly. This year these dedicated employees are recognized during Medical Laboratory Professionals Week (MLPW), April 24-30. “Our lab employees are […]

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Stress Awareness Month

April 11, 2016 Applicants

April is Stress Awareness Month, and we have all experienced stress in some form or another. Stress takes a toll on our minds, our bodies and even our relationships with others. This month, we’re reminded of the importance of managing stress to lead healthier, more fulfilling lives. Signs of stress Your mind and body are […]

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Committed To Protecting My Family

March 28, 2016 #Committed2 You

The moment I found out my husband and I were expecting, I was overrun with so many emotions. After all the celebrating and excitement, the fear started to creep in. I don’t know how to be a mom. How do I raise a child that doesn’t have four legs? Those children have been easy. Make […]

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